I think he's asking for people to start their characters as C-list so that in-game events can transpire, leading to their advancement by story means. If they came in with S-list powers, then what is there to really learn or develop? It's not so difficult taking an OP character and telling them not to be OP as compared to starting out with a C-list character and by sandbox and constant interactions with other writers (that you hope to constantly have), devising plots where they could train, improve, and learn new abilities. To me, that's way more challenging in a sandbox game versus if it was GM-led, then that would be a different story.